Denel PMP cannot pay January salaries


Staff at ammunition manufacturer Denel Pretoria Metal Pressings (PMP) will not be getting paid their January salaries due to no or limited activity taking place at the company from December.

In an infogram dated 21 January 2022, PMP CEO Phaladi Petje told staff that “due to no or limited working activities taking place as from the 7th of December, no cash could be generated to pay the outstanding salary for December 2021 and salaries for January 2022.”

Another infogram, dated 7 December, informed those working at PMP that all their November salaries had been paid, but funds to pay 50% of thirteenth cheques for qualifying employees would be delayed.

In last week’s message to employees, Petje noted the agreement regarding salary payments and related working conditions remained intact and “employees are expected to be at work on Monday 24 January to work on current projects to ensure the generation of cash to pay outstanding salaries and the 13th cheque and to ensure the future sustainability of PMP.”

He added that intensive effort is being made to sell available stock and to collect cash in the shortest possible time.

The broader Denel Group owes staff in excess of R650 million in salaries and owes suppliers R900 million.

PMP has fared better than some other Denel divisions like Land Systems and Dynamics, whose staff have received no or partial pay for over a year.

Last year Denel announced the implementation of voluntary severance packages for staff in an effort to cut costs. It is facing pressure from trade unions and the labour court over salaries and benefits that have been unpaid since mid-2020. In February, Denel is due in court to face off against labour organisation Solidarity over unpaid salaries from the eighth month of 2021 to date.

Denel’s liquidity crisis has affected its ability to supply the South African National Defence Force (SANDF) with ammunition, spares and equipment.

Last year, Major General Setete Malakoane, in a letter to then South African Air Force (SAAF) acting chief Lieutenant General Mzayifani Buthelezi, expressed concern about Denel PMP’s ability to meet contractual commitments to the air force. Doubts were raised about Denel PMP continuing to supply “some aircraft cartridges and small to medium calibre ammunition” with a knock-on effect on SAAF combat readiness.